Valaris Ltd (VAL)
NYSE:VAL
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Valaris
(NYSE:VAL)
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Rating:64Neutral
Price Target:
$119.00
▲(34.37% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by improved profitability and a stronger balance-sheet profile, offset by inconsistent cash conversion and earnings-quality concerns. Technicals suggest consolidation rather than strong momentum. Valuation is pressured by the negative P/E and lack of dividend data, while corporate events are supportive on backlog but tempered by heightened regulatory risk around the pending merger.
Positive Factors
Contract Backlog & Utilization
A near-$5B backlog with thousands of contracted rig days and heavy floater exposure provides durable revenue visibility across 2026–2028. Long, multi-year awards (e.g., Petrobras drillship extension) support stable top-line cash flow and reduce short-term utilization risk for core fleet segments.
Negative Factors
Earnings-Quality Volatility
Discrepancies between net and operating margins and reliance on non-operating items introduce persistent earnings-quality risk. Such volatility reduces the reliability of reported earnings as a proxy for cash generation, complicating forecasting and masking true operating trends for investors and lenders.
Read all positive and negative factors
Positive Factors
Negative Factors
Contract Backlog & Utilization
A near-$5B backlog with thousands of contracted rig days and heavy floater exposure provides durable revenue visibility across 2026–2028. Long, multi-year awards (e.g., Petrobras drillship extension) support stable top-line cash flow and reduce short-term utilization risk for core fleet segments.
Read all positive factors
Valaris (VAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.59B
Dividend YieldN/A
Average Volume (3M)971.12K
Price to Earnings (P/E)―
Beta (1Y)0.78
Revenue Growth-9.95%
EPS Growth233.69%
CountryUS
Employees4,130
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)14.36
Shares Outstanding69,251,780
10 Day Avg. Volume888,408
30 Day Avg. Volume971,117
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)1.12
Price to Sales (P/S)1.50
P/FCF Ratio17.55
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue3.69
Enterprise Value/Gross Profit15.05
Enterprise Value/Ebitda12.62
Forecast
1Y Price Target
$76.00Price Target Upside-14.18% Downside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)3.51
Revenue Forecast (FY)$2.14B
Valaris Business Overview & Revenue Model
Company Description
Valaris Limited provides offshore contract drilling services to the international oil and gas industry. The company owns an offshore drilling rig fleet of 56 rigs, which include 11 drillships, 4 dynamically positioned semisubmersible rigs, 1 moore...
How the Company Makes Money
Valaris makes money by contracting its offshore drilling rigs and related services to oil and gas operators under drilling contracts. The core revenue stream is contract drilling revenue, typically earned on a dayrate basis (a fixed fee per operat...
Valaris Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong financial and operational performance with significant contract awards and a robust outlook for offshore drilling demand, despite some challenges in maintaining continuous operations and near-term commodity price uncertainties.Positive Updates
Strong Financial Performance
Valaris delivered a strong quarter with adjusted EBITDA of $163 million and free cash flow of $237 million, supported by solid operational performance and a fleet-wide revenue efficiency of 95%.
Negative Updates
Decreased Revenue and EBITDA
Total revenues decreased to $596 million from $615 million in the prior quarter. Adjusted EBITDA also fell from $201 million to $163 million due to fewer operating days and the absence of a prior quarter's nonrecurring benefit.
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Q3-2025 Updates
Positive
Negative
Strong Financial Performance
Valaris delivered a strong quarter with adjusted EBITDA of $163 million and free cash flow of $237 million, supported by solid operational performance and a fleet-wide revenue efficiency of 95%.
Read all positive updates
Company Guidance
In the third quarter of 2025, Valaris reported strong financial results, achieving an adjusted EBITDA of $163 million and generating an adjusted free cash flow of $237 million. The company maintained a fleet-wide revenue efficiency of 95% and repurchased $75 million of shares, reflecting a commitment to shareholder returns. Valaris also secured nearly $200 million in new contracts and extensions, increasing its total backlog to $4.5 billion. Notably, the company sold the 27-year-old jack-up VALARIS 247 for $108 million in cash, enhancing financial flexibility. Looking ahead, Valaris anticipates strong demand in the offshore drilling market, with a robust pipeline of opportunities, particularly in deepwater regions, supporting its high-specification fleet. The company remains focused on operational excellence, commercial strategy execution, and disciplined cost and fleet management to deliver long-term shareholder value.Valaris Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
56
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.21B | 2.37B | 2.36B | 1.78B | 1.60B | 1.23B |
| Gross Profit | 542.30M | 593.00M | 601.70M | 240.60M | 219.30M | 164.50M |
| EBITDA | 646.80M | 797.40M | 487.80M | 142.20M | 154.80M | 89.70M |
| Net Income | 1.00B | 982.80M | 373.40M | 865.40M | 176.50M | -4.49B |
Balance Sheet | ||||||
| Total Assets | 5.36B | 5.30B | 4.42B | 4.32B | 2.86B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 584.40M | 606.40M | 368.20M | 620.50M | 724.10M | 608.70M |
| Total Debt | 1.15B | 1.20B | 1.17B | 1.16B | 565.60M | 555.30M |
| Total Liabilities | 2.20B | 2.13B | 2.18B | 2.33B | 1.56B | 1.53B |
| Stockholders Equity | 3.16B | 3.17B | 2.24B | 1.99B | 1.29B | 1.07B |
Cash Flow | ||||||
| Free Cash Flow | 116.68M | 202.70M | -99.70M | -428.60M | -80.00M | -124.90M |
| Operating Cash Flow | 457.74M | 546.20M | 355.40M | 267.50M | 127.00M | -66.00M |
| Investing Cash Flow | -218.10M | -205.60M | -452.30M | -665.80M | -16.70M | -3.70M |
| Financing Cash Flow | -103.58M | -103.60M | -158.30M | 285.50M | -6.40M | 388.70M |
Valaris Technical Analysis
Positive
88.56
Price Trends
97.31
Positive
83.74
Positive
67.89
Positive
Market Momentum
3.63
Negative
64.17
Neutral
88.13
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VAL, the sentiment is Positive. The current price of 88.56 is below the 20-day moving average (MA) of 100.01, below the 50-day MA of 97.31, and above the 200-day MA of 67.89, indicating a bullish trend. The MACD of 3.63 indicates Negative momentum. The RSI at 64.17 is Neutral, neither overbought nor oversold. The STOCH value of 88.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VAL.
Valaris Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.83B | 24.44 | 34.53% | ― | 2.39% | 88.22% | |
70 Outperform | $8.01B | 15.74 | 28.39% | 1.25% | -8.81% | >-0.01% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | $7.59B | -103.42 | 36.16% | ― | -9.95% | 233.69% | |
63 Neutral | $4.21B | 168.70 | 23.78% | ― | -0.92% | 78.25% | |
59 Neutral | $7.59B | 84.88 | 1.45% | 3.24% | -1.33% | -84.10% |
* Energy Sector Average
VAL
Valaris
109.59
73.21
201.24%
NOV
NOV
21.15
9.42
80.29%
OII
Oceaneering International
38.40
19.50
103.17%
TDW
Tidewater
84.56
44.83
112.84%
WFRD
Weatherford International
111.38
66.51
148.23%
Valaris Corporate Events
Legal ProceedingsM&A TransactionsRegulatory Filings and Compliance
Valaris–Transocean Merger Faces Extended DOJ Antitrust Review
Negative
May 5, 2026
On February 9, 2026, offshore drilling contractor Valaris Limited and Swiss-based Transocean Ltd. entered into a Business Combination Agreement under which Transocean will acquire all issued and outstanding Valaris shares in an all-stock transacti...
Business Operations and StrategyFinancial Disclosures
Valaris Expands Offshore Drilling Backlog on New Contracts
Positive
May 4, 2026
Valaris reported its fleet status as of May 4, 2026, highlighting new contracts and extensions that lifted total contract backlog to about $4.9 billion from $4.7 billion in February. The update reflects strong demand for the company’s offsho...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.